Abstract
In the United States of America (U.S.), states set policies to reduce greenhouse gas emissions. A prime issue in a nation as industrially diverse and as large as the U.S. (both geographically and economically) is that while national environmental policies could cover all states equally, they raise equity concerns that could potentially hinder their establishment and subsequent implementation. That is, states that import goods that embody greenhouse gas (GhG) emissions should prefer to regulate production-based emissions while net exporting states tend to adopt policies that apply to the consumption end to reduce the risks of economic decline. Thus, state- rather than national-level environmental accounting is important within the U.S.
In this vein, we focus on statewise CO2 release responsibility. We deploy our own state-level U.S. MRIO model with 50 states and 403 industries and CO2 releases by industry from the U.S. Environmental Protection Agency. We find substantial differences between each state’s consumption- and production-based emissions. By tracking emissions via interstate supply chains, we discover who pollutes for whom among states. While most emissions embodied in consumption tend to derive from within-state sources, it is not true for all states. We also identify states that are likely interstate net importers and exporters of commodities that embody CO2. We also consistently find that several industries contribute more than 80% of the total GhG emissions after accounting for emissions from their upstream supply chain: They are, perhaps not so surprisingly, cement manufacturing, electric power, farming, and energy goods. We, therefore, suggest for reducing GhGs of these specific industries that national environmental policies would be effective. But for other industries, our findings suggest that a strategy of multi-state regional GhG policies should be developed. That is, it likely would be most effective for any given state to link up with neighboring states and major trading partners to develop GhG-reduction policies.